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1
.-
- t
I34 STATE HIIVTORICV., . V,- c: S7- Y
HITT- - & '--
OV. RY
"' r- r- o
71st Yeur No. 57 ( load Morningl It's Saturday. JSorembrr 18. I 978 2 Sections 32 Pages 1 5 ( . vuts
From our wire services
WASHINGTON Despite several positive
economic signs Friday, home builders again
predicted a construction slowdown lies ahead.
New construction of homes and apartments
was at an annual rate of 2.08 million units in
October, virtually unchanged from September,
the Commerce Department said. It was the
eighth consecutive month that starts have been
above the 2 million mark, a level economists
consider to be healthy.
However, building permits, an indication of
future housing construction, fell 2.9 percent, the
department said. Home builders said the in
creases in interest rates suggested by President
Carter will be felt in a sharp slowdown in
housing starts in 1979.
At the same time, the government reported
the personal income of Americans rose by a
strong 1.2 percent in October, largest gain since
mid- summ- er and an encouraging signal that
consumer spending probably will not decline
soon.
And in Paris, members of the Organization for
Economic Cooperation and Development
overwhelmingly endorsed Carter's recent
moves to curb inflation and support the dollar.
The administration's actions were " welcomed
by all," Charles Schultze, chairman of the
President's Council of Economic Advisers, said.
The group's Economic Policy Committee
agreed, and said that both actual economic
growth and prospects for future growth in the
world economy were better than six months ago.
Michael Sumichrast, chief economist for the
National Association of Home Builders, said he
expects housing starts to finish the year at
nearly 2 million, " which is great . . . But next
year will tell a different tale and starts should
fall to about 1.5 million."
The government has issued slightly more
optimistic estimates, saying starts will fall to
between 1.65 million and 1.7 million in 1979.
Sumichrast said the first effects on con- -
struction of the near record high interest rates
being charged for mortgage loans will show up
soon.
" Some of our builders plan to cut back by 20 to
40 percent next year," he said.
On Nov. 1, Carter and the Federal Reserve
Board unveiled a package of measures to rescue
the sagging dollar, including a steep boost in
interest rates.
Most experts say that mortgage interest rates
will hit 11 percent, severely limiting the amount
of funds available for loan by financial in-stitutions.
Mortgage rates currently are above 10 per-cent
in most sections of the nation.
The Commerce Department said its personal
income report showed that the October per-formance
was the best since the 1.3 percent
increase of July.
Income increased at an annual rate of $ 21.3
billion following gains of $ 12.9 billion in Sep-tember
and $ 11.3 billion in August.
One reason for the good showing last month
was unemployment declined from 6 percent in
September to 5.8 percent meaning that 325,000
persons found jobs and were paid.
Another factor, the department said, was the
government's 5.5 percent pay increase for
federal workers that accounted for $ 2.3 billion of
last month's increase.
Wage ceiling
has flexibility
Workers can get raises
that top 7 percent limit
By Patrick Oster
Chicago Sun- Tim- es
WASHINGTON If you've been
concerned that you might fall behind
inflation by going along with President
Carter's voluntary standard on wages,
you might be surprised at how much
flexibility is built in to that 7 percent
ceiling.
As Labor Secretary Ray Marshall
explained the inner workings of the
president's still- developi- ng programs
to a group of reporters Thursday, there
are many ways workers can get more
than a 7 percent increase in total pay
and still stay within the standard. And
by staying within the standard, they
can qualify for the program's rewards.
First, the administration is con-sidering
some rules that would not
ImniffMl;
really count all the increases a worker
gets for his or her fringe benefits,
which, like dollar wages, are governed
by the 7 percent standard.
For example, it may turn out that
final rules won't assess workers for
increases that are, because of inflation,
necessary to keep fringe benefits at
current levels.
Alternatively, fringe benefit in-creases
won now, but paid for in the
future, may be assessed at a fixed,
artificially low figure at the time of the
contract's negotiation. As long as the
artificial figure kept wage increases
within the 7 percent standard, a worker
would be in compliance, even if the
fringe ultimately wound up costing
more.
That sort of artificial approach
already applies with regard to cost- of--'
livng allowances ( COLA) in wage
contracts.
If workers get a full COLA provision
in their contract, the government ar- tifica- lly
will assume that such an in-crease
constitutes only a 6 percent
increase in dollar wages, even if the
cost of living actually exceeds that
percentage later.
That sort of flexibility in computation
of the 7 percent ceiling is just the sort of
approach Teamsters union president
Frank Fitzsimmons has been looking
for, given the expected increases he
thinks will be necessary to maintain his
528, G0O- memb- er union's fringe benefits
at current levels when the union begins
negotiating a new contract in March.
Marshall, however, would not
guarantee that the eventual details of
the president's program, now under
review by the Council on Wage and
Price Stability, will be to Fitzsimmons'
liking. " Ill have to look at the details,"
Marshall said.
Marshall did mention, however, that
there are other aspects of the
program's computation rules that
provide Fitzsimmons and other labor
leaders an opportunity to get actual
increases for their workers in excess of
the 7 percent ceiling.
For example, the wage and price
council, which monitors compliance
with the wage standard, will allow
excess wage increases to the extent
that productivity is increased due to
changes in work rules or practices.
Thus, if a union ends " featherbedding"
or " make work" rules, it might get
credit for a 1 or 2 percent wage increase
that would not count toward the 7
percent limit.
Marshall also noted that a union or
group of workers that gets an employer
to agree to a full COLA could wind up
doing quite well if the president's
program fails to hold inflation below 7
per cent the level of the wage ceiling.
Here's how that might work. If a
group of workers gets a 7 percent in-crease,
in wages and benefits, and if
inflation hits 8 percent next year, the
workers would get the full cost- of- livi- ng
allowance, which is equal to inflation's
rise. They also might get any non- COL- A
increases in their raise.
And if the president's proposal for
( See FORMULA'S, Page 16) Lewis Foy, chairman of Bethlehem Steel Corp. Jtasmnn
Foyj Carter
plan answers
natlon9 call
By Mai Iskandar
Missourian staff writer
At last, " The message has gotten to Washington,"
Lewis Foy, chairman of Bethlehem Steel Corp., said
Friday at the University.
The message, Foy said, is " Overregulation,
overtaxation and overadministration don't work."
Foy spoke at a news conference at the Memorial
Union. He was in Columbia to deliver the keynote
address the 14th annual University Business
Journalism Competition and Workshop held
Thursday and Friday.
Foy said Carter's voluntary wage- pric- e
guidelines policy is proof the message has been
received and concurred with the administrationis
view that inflation is the economy's biggest
problem. But the best route to take in saving the
country from a depression is to not expect one, Foy
said.
If business, the press and everyone else anticipate
Related story, Page 16
an economic slowdown and a failure of protective
" measures, Foy warned, their expectations will
prove self fulfilling.
Foy projected an economic decline but added he
hopes it is minor.
Foy said he intends to " do everything in our
power" to follow the administration's guidelines to
slow inflation.
But if nothing seems to work, he said, two con-sequences
are in store for the country: " A hell of a
depression and mandatory wage and price con-trols."
Foy rejected endorsing plans to implement
Carter's guidelines until he reads the plan in print,
which he said won't be for several weeks.
Foy said Bethlehem Steel developed a guideline of
its own when it boosted its prices by 3 percent on
Aug. 1 and ' ' will stick with it until the end of the year
come low or high water."
On another note, Foy said Japan has exercised
some restraint in international trade by reducing its
exports to the United States 15 percent. However,
other countries beefed up their steel shipments
some by as much as 75 percent.
Foy hopes the Organization for Economic
Coopertion and Development will become a
stabilizing force in the international steel industry,
which he described as piracy oriented.
The OECD includes Canada, U. S. and European
Economic Community countries.
Foy said the American steel companies' in-ternational
trade problems are created when
foreign countries subsidize their steel plants so they
can sell at under cost.
Coming giimcl& y
1 S Rugby: a rough and tumble British cross between soccer and I PxTPl American football. For the women who play rugby throughout the
I -- w' 3iP Midwest, the game is a hard- drivin- g, fast- pace- d, legitimate means
I mm MSi releasin aggressions. Read about these stalwart ruggers in 1
I pjT Vibrations, Sunday in the Missourian.
Farm Family
I Clay Hildreth and his wife
1 Donna are not your usual
Hickman High students.
1 Still in their late teens, they
1 they daily tackle respon- -
sibilities meant for those
1 twice their age; together
I they manage two cattle
1 farms. Read about this
I unusual couple Sunday in
I People.
Chilling Relic ! I ! I
Next to the witness stand there is a . ,. ' O '
I map showing a concentration s?& 8$ P? r T : I
camp, with its seven gas chambers $ i5gm'' Ji I
and its crematoria. A horrible dJrjWk'Wnf I
memento of the past, West Ger-- &&'- - HfrrjlvjLjj g
many's last major war crimes timisiiitiJsai ' HSkl 8
prosecution wanders into its fourth firiSMVW fl 1
year this month. On the kLi sftT ' w' 1
Background page, Sunday in the ?! mJ f
Missourian. nPvBF f
I 9: 39 a. m. to 8 pan. Missouri folk art High School. 1
i Sift WIIl and music festival, University 8: 15 p. m. University Chamber 1
I Memorial Union. Music Series: I Musici, Jesse B
I ftnliir : M P-- m- " Legally Dead," Auditorium. 8 Biay Stephens College Playhouse. g
I 7: 99 p. m. " Carousel," Hickman Movie Uzttago on Pages 14, 15
I Magistrate judge petition drive
appears to benefit Morgett
By Delia Fichtel
Missourian staff writer
An apparent move by Boone County
Democrats to, keep Division I
Magistrate Judge Temple Morgett on
the bench is running against a close
deadline.
County Democrats began circulating
petitions this week to have a third
magistrate position created, although
Norma Robb, chairwoman of the Boone
County Democratic Central Com
mittee, denies it is a move to draft
Morgett.
Nevertheless, Morgett is the can-didate
most frequently discussed by the
Democrats for a third judgeship, and he
said he is seeking the seat Morgett,
who sought a ninth term, was defeated
by Prosecuting Attorney Milt Harper in
the Nov. 7 election.
A successful petition drive could get
Morgett another term, but time and
timing are of the essence.
To conduct a successful drive,
petitioners must collect 500 signatures
of registered voters and have them
certified by the county clerk. The
Circuit Court then would be required to
conduct a public hearing on the need for
a third judge.
The hearing must be advertised for
three consecutive weeks and the ap-pointment
must be made before Jan. 2
when the law providing for a petition
drive becomes void and a new court
( See DEMOCRATS, Page 16)
Reports no negative effects
Broadway widening QK'd
By Cathy Reiman
Missourian staff writer
The widening of West Broadway
would have no negative effects on the
street's cultural resources, according
to a preliminary report released
Friday..
The report, done by Fischer & Stein
Associates, was- - ordered by the
Missouri Department of Natural
I Resources in August at the request of a
group of Columbians who oppose the
widening project
Although the report has not been
completed and approved by the state ( a
requirement before construction can
begin), Acting City Manager Ray Beck
said the state probably will " go with the
consultant report"
There is no adverse effect on the
" historic, prehistoric or architectural
resources" along West Broadway, the
report said.
Following announcement of the
report's results, Beck, who is also the
city's public works director, said be will
ask the City Council at Its Monday
meeting to establish a new street width
no less than 49 feet ( 14.7 meters), but
" preferably" 51 feet ( 15.3 meters).
The dty bad proposed the widening
project because of heavy traffic along
the road. A 51- fo- ot ( 14.7- mete- r) widSfc
( See STREET, Page 1C)

1
.-
- t
I34 STATE HIIVTORICV., . V,- c: S7- Y
HITT- - & '--
OV. RY
"' r- r- o
71st Yeur No. 57 ( load Morningl It's Saturday. JSorembrr 18. I 978 2 Sections 32 Pages 1 5 ( . vuts
From our wire services
WASHINGTON Despite several positive
economic signs Friday, home builders again
predicted a construction slowdown lies ahead.
New construction of homes and apartments
was at an annual rate of 2.08 million units in
October, virtually unchanged from September,
the Commerce Department said. It was the
eighth consecutive month that starts have been
above the 2 million mark, a level economists
consider to be healthy.
However, building permits, an indication of
future housing construction, fell 2.9 percent, the
department said. Home builders said the in
creases in interest rates suggested by President
Carter will be felt in a sharp slowdown in
housing starts in 1979.
At the same time, the government reported
the personal income of Americans rose by a
strong 1.2 percent in October, largest gain since
mid- summ- er and an encouraging signal that
consumer spending probably will not decline
soon.
And in Paris, members of the Organization for
Economic Cooperation and Development
overwhelmingly endorsed Carter's recent
moves to curb inflation and support the dollar.
The administration's actions were " welcomed
by all," Charles Schultze, chairman of the
President's Council of Economic Advisers, said.
The group's Economic Policy Committee
agreed, and said that both actual economic
growth and prospects for future growth in the
world economy were better than six months ago.
Michael Sumichrast, chief economist for the
National Association of Home Builders, said he
expects housing starts to finish the year at
nearly 2 million, " which is great . . . But next
year will tell a different tale and starts should
fall to about 1.5 million."
The government has issued slightly more
optimistic estimates, saying starts will fall to
between 1.65 million and 1.7 million in 1979.
Sumichrast said the first effects on con- -
struction of the near record high interest rates
being charged for mortgage loans will show up
soon.
" Some of our builders plan to cut back by 20 to
40 percent next year," he said.
On Nov. 1, Carter and the Federal Reserve
Board unveiled a package of measures to rescue
the sagging dollar, including a steep boost in
interest rates.
Most experts say that mortgage interest rates
will hit 11 percent, severely limiting the amount
of funds available for loan by financial in-stitutions.
Mortgage rates currently are above 10 per-cent
in most sections of the nation.
The Commerce Department said its personal
income report showed that the October per-formance
was the best since the 1.3 percent
increase of July.
Income increased at an annual rate of $ 21.3
billion following gains of $ 12.9 billion in Sep-tember
and $ 11.3 billion in August.
One reason for the good showing last month
was unemployment declined from 6 percent in
September to 5.8 percent meaning that 325,000
persons found jobs and were paid.
Another factor, the department said, was the
government's 5.5 percent pay increase for
federal workers that accounted for $ 2.3 billion of
last month's increase.
Wage ceiling
has flexibility
Workers can get raises
that top 7 percent limit
By Patrick Oster
Chicago Sun- Tim- es
WASHINGTON If you've been
concerned that you might fall behind
inflation by going along with President
Carter's voluntary standard on wages,
you might be surprised at how much
flexibility is built in to that 7 percent
ceiling.
As Labor Secretary Ray Marshall
explained the inner workings of the
president's still- developi- ng programs
to a group of reporters Thursday, there
are many ways workers can get more
than a 7 percent increase in total pay
and still stay within the standard. And
by staying within the standard, they
can qualify for the program's rewards.
First, the administration is con-sidering
some rules that would not
ImniffMl;
really count all the increases a worker
gets for his or her fringe benefits,
which, like dollar wages, are governed
by the 7 percent standard.
For example, it may turn out that
final rules won't assess workers for
increases that are, because of inflation,
necessary to keep fringe benefits at
current levels.
Alternatively, fringe benefit in-creases
won now, but paid for in the
future, may be assessed at a fixed,
artificially low figure at the time of the
contract's negotiation. As long as the
artificial figure kept wage increases
within the 7 percent standard, a worker
would be in compliance, even if the
fringe ultimately wound up costing
more.
That sort of artificial approach
already applies with regard to cost- of--'
livng allowances ( COLA) in wage
contracts.
If workers get a full COLA provision
in their contract, the government ar- tifica- lly
will assume that such an in-crease
constitutes only a 6 percent
increase in dollar wages, even if the
cost of living actually exceeds that
percentage later.
That sort of flexibility in computation
of the 7 percent ceiling is just the sort of
approach Teamsters union president
Frank Fitzsimmons has been looking
for, given the expected increases he
thinks will be necessary to maintain his
528, G0O- memb- er union's fringe benefits
at current levels when the union begins
negotiating a new contract in March.
Marshall, however, would not
guarantee that the eventual details of
the president's program, now under
review by the Council on Wage and
Price Stability, will be to Fitzsimmons'
liking. " Ill have to look at the details,"
Marshall said.
Marshall did mention, however, that
there are other aspects of the
program's computation rules that
provide Fitzsimmons and other labor
leaders an opportunity to get actual
increases for their workers in excess of
the 7 percent ceiling.
For example, the wage and price
council, which monitors compliance
with the wage standard, will allow
excess wage increases to the extent
that productivity is increased due to
changes in work rules or practices.
Thus, if a union ends " featherbedding"
or " make work" rules, it might get
credit for a 1 or 2 percent wage increase
that would not count toward the 7
percent limit.
Marshall also noted that a union or
group of workers that gets an employer
to agree to a full COLA could wind up
doing quite well if the president's
program fails to hold inflation below 7
per cent the level of the wage ceiling.
Here's how that might work. If a
group of workers gets a 7 percent in-crease,
in wages and benefits, and if
inflation hits 8 percent next year, the
workers would get the full cost- of- livi- ng
allowance, which is equal to inflation's
rise. They also might get any non- COL- A
increases in their raise.
And if the president's proposal for
( See FORMULA'S, Page 16) Lewis Foy, chairman of Bethlehem Steel Corp. Jtasmnn
Foyj Carter
plan answers
natlon9 call
By Mai Iskandar
Missourian staff writer
At last, " The message has gotten to Washington,"
Lewis Foy, chairman of Bethlehem Steel Corp., said
Friday at the University.
The message, Foy said, is " Overregulation,
overtaxation and overadministration don't work."
Foy spoke at a news conference at the Memorial
Union. He was in Columbia to deliver the keynote
address the 14th annual University Business
Journalism Competition and Workshop held
Thursday and Friday.
Foy said Carter's voluntary wage- pric- e
guidelines policy is proof the message has been
received and concurred with the administrationis
view that inflation is the economy's biggest
problem. But the best route to take in saving the
country from a depression is to not expect one, Foy
said.
If business, the press and everyone else anticipate
Related story, Page 16
an economic slowdown and a failure of protective
" measures, Foy warned, their expectations will
prove self fulfilling.
Foy projected an economic decline but added he
hopes it is minor.
Foy said he intends to " do everything in our
power" to follow the administration's guidelines to
slow inflation.
But if nothing seems to work, he said, two con-sequences
are in store for the country: " A hell of a
depression and mandatory wage and price con-trols."
Foy rejected endorsing plans to implement
Carter's guidelines until he reads the plan in print,
which he said won't be for several weeks.
Foy said Bethlehem Steel developed a guideline of
its own when it boosted its prices by 3 percent on
Aug. 1 and ' ' will stick with it until the end of the year
come low or high water."
On another note, Foy said Japan has exercised
some restraint in international trade by reducing its
exports to the United States 15 percent. However,
other countries beefed up their steel shipments
some by as much as 75 percent.
Foy hopes the Organization for Economic
Coopertion and Development will become a
stabilizing force in the international steel industry,
which he described as piracy oriented.
The OECD includes Canada, U. S. and European
Economic Community countries.
Foy said the American steel companies' in-ternational
trade problems are created when
foreign countries subsidize their steel plants so they
can sell at under cost.
Coming giimcl& y
1 S Rugby: a rough and tumble British cross between soccer and I PxTPl American football. For the women who play rugby throughout the
I -- w' 3iP Midwest, the game is a hard- drivin- g, fast- pace- d, legitimate means
I mm MSi releasin aggressions. Read about these stalwart ruggers in 1
I pjT Vibrations, Sunday in the Missourian.
Farm Family
I Clay Hildreth and his wife
1 Donna are not your usual
Hickman High students.
1 Still in their late teens, they
1 they daily tackle respon- -
sibilities meant for those
1 twice their age; together
I they manage two cattle
1 farms. Read about this
I unusual couple Sunday in
I People.
Chilling Relic ! I ! I
Next to the witness stand there is a . ,. ' O '
I map showing a concentration s?& 8$ P? r T : I
camp, with its seven gas chambers $ i5gm'' Ji I
and its crematoria. A horrible dJrjWk'Wnf I
memento of the past, West Ger-- &&'- - HfrrjlvjLjj g
many's last major war crimes timisiiitiJsai ' HSkl 8
prosecution wanders into its fourth firiSMVW fl 1
year this month. On the kLi sftT ' w' 1
Background page, Sunday in the ?! mJ f
Missourian. nPvBF f
I 9: 39 a. m. to 8 pan. Missouri folk art High School. 1
i Sift WIIl and music festival, University 8: 15 p. m. University Chamber 1
I Memorial Union. Music Series: I Musici, Jesse B
I ftnliir : M P-- m- " Legally Dead," Auditorium. 8 Biay Stephens College Playhouse. g
I 7: 99 p. m. " Carousel," Hickman Movie Uzttago on Pages 14, 15
I Magistrate judge petition drive
appears to benefit Morgett
By Delia Fichtel
Missourian staff writer
An apparent move by Boone County
Democrats to, keep Division I
Magistrate Judge Temple Morgett on
the bench is running against a close
deadline.
County Democrats began circulating
petitions this week to have a third
magistrate position created, although
Norma Robb, chairwoman of the Boone
County Democratic Central Com
mittee, denies it is a move to draft
Morgett.
Nevertheless, Morgett is the can-didate
most frequently discussed by the
Democrats for a third judgeship, and he
said he is seeking the seat Morgett,
who sought a ninth term, was defeated
by Prosecuting Attorney Milt Harper in
the Nov. 7 election.
A successful petition drive could get
Morgett another term, but time and
timing are of the essence.
To conduct a successful drive,
petitioners must collect 500 signatures
of registered voters and have them
certified by the county clerk. The
Circuit Court then would be required to
conduct a public hearing on the need for
a third judge.
The hearing must be advertised for
three consecutive weeks and the ap-pointment
must be made before Jan. 2
when the law providing for a petition
drive becomes void and a new court
( See DEMOCRATS, Page 16)
Reports no negative effects
Broadway widening QK'd
By Cathy Reiman
Missourian staff writer
The widening of West Broadway
would have no negative effects on the
street's cultural resources, according
to a preliminary report released
Friday..
The report, done by Fischer & Stein
Associates, was- - ordered by the
Missouri Department of Natural
I Resources in August at the request of a
group of Columbians who oppose the
widening project
Although the report has not been
completed and approved by the state ( a
requirement before construction can
begin), Acting City Manager Ray Beck
said the state probably will " go with the
consultant report"
There is no adverse effect on the
" historic, prehistoric or architectural
resources" along West Broadway, the
report said.
Following announcement of the
report's results, Beck, who is also the
city's public works director, said be will
ask the City Council at Its Monday
meeting to establish a new street width
no less than 49 feet ( 14.7 meters), but
" preferably" 51 feet ( 15.3 meters).
The dty bad proposed the widening
project because of heavy traffic along
the road. A 51- fo- ot ( 14.7- mete- r) widSfc
( See STREET, Page 1C)